A U.S. federal district judge may have denied a temporary restraining order that would have blocked an all-but-approved settlement and contract between the Internet Corporation for Assigned Names and Numbers and dot-com registrar Verisign, but the two entities continue to face challenges as they work to settle a long-standing feud.
On Nov. 30, a San Jose, Calif., judge turned down a request from the Coalition for ICANN Transparency to prevent ICANN and Verisign from signing a contract that would have allowed Verisign to retain its highly profitable control over dot-com and dot-net registrations through as late as Nov. 30, 2012. ICANN quickly claimed victory in the case.
“The judge gave a simple ruling, and we would agree with that, really. There was no basis for a TRO,” ICANN President Paul Twomey told reporters during an early Dec. 1 teleconference during ICANN’s annual international meeting in Canada.
In fact, the ruling was not so much a victory as a reprieve: ICANN does not plan to finalize the proposed agreements with Verisign until early next year, so a TRO would have been premature.
“We’re not making any decisions [about matters involving Verisign] at the board meeting here,” Twomey said, noting that ICANN continues to accept public comment about the issues and will vote on the proposed settlement and contract at a later, unspecified date. “It was never the intention nor is it on the agenda for this meeting,” he said.
CFIT, a recently formed U.S.-based lobbying group representing Momentous.ca Corp., a Canadian Verisign channel partner, immediately began to push for a preliminary injunction instead, claiming certain provisions of the contract would allow Verisign to compete unfairly in the domain name secondary market with companies like Momentous, Go Daddy, and other resellers. A hearing has been scheduled for Feb. 10.
But that’s not the extent of ICANN’s and Verisign’s legal headaches. The World Association of Domain Name Developers, an association of domain name registrants, has filed a suit claiming that the proposed deal between the two is anti-competitive and violates U.S. antitrust legislation. In addition, the suit, filed in the same court as the CFIT challenge, alleges that ICANN and Verisign have engaged in conspiracy, monopolization and illegal price fixing.
But wait—there’s more: Pool.com, a subsidiary of Momentous, filed a suit against ICANN and Verisign in Canada in 2001. That suit sought to block ICANN approval of a new Verisign service that would have competed in the domain-name reseller market. The suit was made moot by ensuing battles between Verisign and ICANN, but it may soon be reactivated in light of current developments, sources close to the matter say.
The proposed settlement and new contract between ICANN and Verisign came to light in late October, seemingly ending pending litigation and a running battle that began in 2001 between the two entities. The disputes erupted when ICANN strenuously objected to VeriSign marketing tactics that ICANN board members thought were shady. Among the tactics was a paid search engine known as Site Finder. Through clever manipulation of the domain name system, VeriSign redirected surfers who requested nonexistent dot-com and dot-net URLs – which are far and away the most common top-level domains on the Web – to the Site Finder site, where the search results automatically presented to them were paid for by VeriSign clients.
A cease-and-desist order sent to VeriSign by ICANN was met with outrage by the dot-com/dot-net registrar, which nevertheless bowed to ICANN’s lawyers and deactivated Site Finder. Eventually, VeriSign filed suit against ICANN, charging the nonprofit with breach of contract and violation of U.S. federal and state antitrust laws. In the interim, VeriSign developed a powerful group of backers, primarily technology companies, and began to chip away at ICANN’s authority to control the Internet’s infrastructure.
Primary among the terms of the proposed agreements now under fire are that VeriSign will retain the dot-com registry in exchange for withdrawing from the litigation (Verisign Inc. sv. ICANN) and ceasing to attempt to undermine ICANN’s authority and grip on the international domain name registration process. Under the proposed agreement, VeriSign will not institute any new registry services (like Site Finder) without first notifying ICANN and submitting them to a neutral international panel that will evaluate the services for potential effects on competition, security and the stability of the Internet.
“The big story [about the proposed settlement] deals with the problems caused by [Verisign's now-defunct] Site Finder service,” Twomey said during Friday morning’s teleconference. “The proposed agreement outlines a process to bring in new registry services that have been tested for competition issues and also for security and stability.”
In the future, after a registrar has submitted a proposal for a new registry service, “potential competition issues will be referred to the appropriate national agency within 45 days,” Twomey said. Security and stability issues will be evaluated within 90 days by a new ICANN agency set up to deal with them.
Pricing is another big issue dealt with by the proposed new dot-com agreement with Verisign, according to Twomey.
“Under the current contract, Verisign has the capacity to request price increases, but has never done so,” Twomey said. “Under the proposed contract, no price increases can occur before Jan. 1, 2007.”
In addition, Verisign has to tender six months’ notice to ICANN of any proposed price increase, and “the cost has to be equal to all registrants.” (In other words, Verisign can’t charge a premium for certain highly desirable domain names.)
Under the proposed new contract, Verisign will also be required to maintain the 10-year registration period option. Combining that with the six-month notification of a pending registration fee hike will allow current domain-name owners to re-register their valuable properties for 10 years and avoid the price increase if they desire, Twomey noted.
The proposed agreement between the warring factions comes at a particularly auspicious time for ICANN, which continually faces criticism for what its detractors call an unfair partiality to the U.S. and a lackey relationship with the U.S. Department of Commerce (which maintains veto power over ICANN’s decisions). Verisign is U.S.-based.
